Refurbishment, Operate and Transfer Programme & Total Facilities Management Strategy, with Minister & Deputy Minister

Meeting report

Chairperson’s opening remarks
The Chairperson welcomed all Members and officials as well as the Minister and Deputy Minister. She registered apologies on behalf of the Minister, who indicated that she needed to leave early and Ms L Mjobo (ANC), who would be joining the meeting later.

Minister of DPWI’s opening remarks
Minister de Lille introduced the Infrastructure South Africa (ISA) team and indicated that Professor Kgosientsho Ramokgopa, Head of the ISA team, would be joining the meeting later.

Ms Mameetse Masemola, Head, Infrastructure Investment, Planning and Oversight, ISA, said Mr Tladi would take the Committee through the Refurbishment, Operate and Transfer Programme (ROTP) presentation.

The Chairperson said it was brought to her attention that one more member was needed to form a quorum.

Ms S Graham (DA) felt that the lack of quorum was not material at this point because the Committee would not be making decisions but was only receiving a presentation.

Members agreed to continue with the briefing, expecting a quorum before the end of the meeting.

ISA briefing on ROTP rollout
Mr Thabang Tladi, Western Cape Lead, Infrastructure Investment, Planning and Oversight, ISA, said the ROTP was meant to deal with maintenance backlogs that accrued over time.

Financial overview
At the time of reporting, assets under management were valued at R134.55 billion. The fixed asset portfolio included 90 000 assets, of which 62.6% were rated as either fair, poor or very poor. The number of unoccupied facilities increased from 1 875 in 2021 to 2 029 in 2022. 1 042 facilities had been illegally occupied. R2.12 billion was spent on property maintenance and R5.12 billion on operating leases in the 2020/21 financial year. R38.6 billion of the R76.3 billion budget for the 2022/23 MTEF had been allocated mainly to repairs, maintenance, and lease payments.

Operational context
The gradual loss of skills led to the continuous degrading of assets. The Department sought collaboration with the private sector for innovative solutions to solve technical problems.

Long-term leasehold strategy
The plan is to attract the private sector by improving the value retention of existing assets through refurbishment, maintenance and proper management of facilities.

(See Presentation)

The Chairperson indicated that a quorum had been reached as two members had subsequently joined the meeting.

Minister’s comments
Minister de Lille clarified that the reference to Telkom Towers that was made by the Chairperson in a meeting the previous day was not the same Telkom Towers referred to in the current presentation. The Department would return to the Committee and report back on the Telkom Towers building that was refurbished for the South African Police Services (SAPS). Three empty office buildings in the Telkom Towers precinct would become part of the ROTP. The Department would be initiating the policy review process. Regulations for the Government Immovable Asset Management Act (GIAMA) of 2007 had not been developed. The Department was in the process of drafting regulations for GIAMA to assist with future policy development. Covid-19 had a major impact on the utilisation of office spaces. The policy research unit would start researching the situation in other parts of the world. This would be followed by a policy review process that would commence before the end of this year.

DTI briefing on the draft Total Facilities Management (TFM) strategy

Interim Chairperson’s opening remarks
Ms Zimbini Hill, Interim Chairperson, IDT, said the entity valued the partnership with the Department and was excited to be part of the journey of rejuvenating public infrastructure and ensuring that it was sustainable.  

Ms Tebogo Malaka, Acting Chief Executive Officer (CEO), IDT, introduced the Chief Executive, Programme Management Services, to present the TFM strategy.

The Chief Executive, Programme Management Services, IDT, said the TFM strategy was drafted in consultation with the DPWI. The presentation was in line with the request from the Committee regarding aligning the IDT strategy with the TFM strategy of the DPWI. The focus was on preventative rather than reactive maintenance to increase revenue for the IDT during the 2022/23 financial year and beyond. The guide to developing the DPWI strategy would consider the Immovable Asset Management Framework and form part of the final strategy. The strategy is aligned with the ROTP which includes maintenance as an ongoing process. The draft maintenance strategy aims to be proactive in making sure that assets are well maintained in accordance with best practice principles and to reduce litigation resulting from poorly maintained assets. Assets should be efficient, effective, functional, and operational and meet all health and safety requirements.

The delivery of maintenance programmes is guided by three principles, i.e. Project Management Body of Knowledge (PMBOK), Infrastructure Delivery Management System (IDMS) and the Framework for Infrastructure Delivery and Procurement Management (FIDPM). Maintenance programmes need to comply with the PMFA, GIAMA, Construction Industry Development Board (CIDB) guidelines and the Standard for Uniformity in Engineering and Construction Works Contracts.

The developmental approach of the IDT includes working with relevant Sector Education and Training Authorities (SETAs) to create jobs and consistently reporting work opportunities on the EPWP platform on behalf of government departments. The Ministry was committed to supporting the sustainability of the IDT through the shareholder compact. At the time of reporting, the IDT portfolio was R4.5 billion. A further R2 billion would be required for the maintenance portfolio. Establishing a facilities management unit and mentorship would be key to the successful execution of the action plan for the maintenance programme.

(See Presentation)

Minister’s comments
Minister de Lille said everyone was aware of the maintenance backlog of state-owned buildings which had not been maintained over the years. This meant that there was a lot of work to do for all role players. In terms of her mandate, she embarked on reviewing the maintenance policy of the Department which led to the development of the DPWI strategy that is scheduled for completion by the end of September 2022. Work by any implementing department would have to follow the DPWI maintenance strategy. The Department would engage with the IDT to ensure alignment of strategies and uniformity of maintenance work countrywide. Maintenance should be dealt with consistently according to specifications included in SLAs with entities. With implementing agencies, clear deliverables and KPIs would be included in Service Level Agreements (SLAs). Regarding advice from the Auditor-General (AG), funding would be released in tranches, measured against deliverables. The overlay of IT would be key in all aspects of maintenance work, including the strategy. It should be comparable to the quality and standard of maintenance in the private sector. The Department was planning to engage with all implementing agencies once the first draft of the strategy was finalised. The workload was big enough for all agencies because of the maintenance backlog. The intention was to upscale the maintenance programme but DPWI had not done well on spending the maintenance budget. She was hopeful that the new strategy and policy would arrest the lack of maintenance of government buildings. The Department was spending a lot of money on employing private security companies to prevent buildings from being further vandalised. The project was urgent, hence the end of September 2022 deadline. Facility management maintenance would be packaged differently in the budget for the next financial year to catch up with the maintenance backlog throughout the country.

Discussion
The Chairperson observed that Prof Ramokgopa had not joined the meeting. She reminded the Minister that the business of the Committee should be taken seriously.

The Minister agreed and apologised for Prof Ramokgopa's absence.

Ms A Siwisa (EFF) offered her opportunity to speak to Mr Thring who indicated that he would be leaving early.

Mr W Thring (ACDP) noted that both presentations referred to the importance of the asset register. He wanted to know how integrating the two entities would ensure that the DPWI Asset Register was up to date and complete. Although systems and programmes were in place, a large number of corruption complaints are continuously being reported, especially in the education sector. He questioned the effectiveness of the procurement processes throughout government departments and entities.

Ms Siwisa was concerned about the similarities in the scope of work on maintenance for both ISA and IDT. She sought clarity on the oversight role of the Committee on infrastructure projects considering that funding might come from entities outside the responsibility of the Committee. She requested a breakdown of the R2.2 billion spent by ISA on property maintenance in the 2020/21 financial year. The number of unoccupied facilities increased from 1 875 in 2021 to 2 029 in 2022. She was of the opinion that the empty buildings could have been made functional by allocating them to sister departments, for example, to the Department of Higher Education and Training for housing students. The services of private security companies would not be needed if buildings were occupied. She drew attention to an unoccupied DPWI building in the Eastern Cape that had been vandalised. She wanted to know at what costs the panel of expert firms would be appointed to address key financial, technical, legal and environmental aspects.

Ms Siwisa applauded the IDT for its representation of female management.

Lastly, she asked what interventions or consequent management plan was in place should the TFM strategy fail or targets were not met.

Ms Graham found it unfortunate that the acronym ROT instead of ROTP was being used and proposed that the P should be retained. She was of the opinion that a large number of empty properties could be used for various purposes. She asked if the current leases included a maintenance element and proposed that maintenance should be a built-in strategy transferrable to tenants. Properties had been devolved to sister departments without properly communicating their role in maintaining the buildings. Clarity was needed on who should be responsible for the maintenance of devolved buildings. She requested more detail about the DPWI Socio-economic Maximisation Model to understand the model. In addition, she requested copies of the Letting-out Strategy and the Immovable Asset Maintenance document. She was concerned about ISA aspects embedded with entities over which the Committee did not have oversight. She requested detail about the panel of experts, e.g. who interviewed the members of the panel and the costs involved. She asked that the Committee be informed about the legal advice sought on reviewing regulations regarding Phase 1A of the ROTP. Ms Graham was pleased with the idea of the IT management system which would allow the DPWI to be kept in the loop on whoever was doing maintenance. She highlighted the need for specialised maintenance on heritage buildings such as the Klipplaat police station in her area. She was concerned that the DPWI was appointing contractors who were not heritage specialists and who ended up destroying heritage buildings. She urged for greater collaboration on devolved buildings to ensure that maintenance is adhered to before it becomes a DPWI issue. She was satisfied with the direction of the Department and called for an end to working in silos and to follow a more overarching approach.

Ms M Hicklin (DA) questioned the introduction of a new system after so much money had been invested in the existing system. She wanted to know what the money had been spent on, considering that the system was not functional. She asked if the Department was able to account for the number of buildings and pieces of land in Midrand and Tshwane. The issue of maintenance of heritage buildings, including the Union Buildings, was of concern because it was unclear which department was responsible for maintenance and refurbishment. Instead of working in silos, a cohesive approach would enable good oversight and create a solid register for tracking each building. She proposed that the business models of property trading entities in the private sector should be analysed to understand their practices and to determine what elements could be applied in the public sector.

Ms S van Schalkwyk (ANC) said the maintenance system that the IDT was planning to develop might be duplication in terms of the Immovable Asset Register. She suggested implementing a seamless management system across all spheres of government which would be more effective and save costs. The 1 042 illegally occupied facilities reported by ISA were a concern. She sought clarity on what action would be taken to address the situation. She asked what the main pillars were of the DPWI Socio-economic Maximisation Model and to which branches it would apply. She applauded ISA for the competent and experienced female staff complement. She suggested that ISA should take over larger infrastructure projects. The IDT should manage the smaller projects and the Property Management Trading Entity (PMTE) to assist communities with job creation.

Mr E Mathebula (ANC) welcomed the report on the ROTP rollout and said it would go a long way to help in realising the plans of the Department. Identifying 100% of assets had been a struggle. The unit would assist in identifying assets and buildings that the Department might not have been aware of. The Department was spending unnecessary money by leasing buildings to government departments. He was concerned that duplicating some tasks might confuse whether the unit or departments should take responsibility for the maintenance of devolved buildings.

Ms L Mjobo (ANC) agreed with the sentiments about unused houses expressed by previous speakers.  

The Chairperson said ISA had correctly captured the situation in the Department. The DPWI had the potential to sustain itself but fell short because of the failure to maintain buildings. The asbestos removal issue has been raised on several occasions. People are still living in asbestos-roof houses which poses the risk of future claims due to asbestos-related illness. She appreciated the new strategy but cautioned that the starting point was to ensure a fully working asset register. The Department, on a previous occasion, reported on the employment of property management expertise but the Asset Register had not been finalised since 2019. The Minister indicated that ISA recently deployed more than 300 environmental experts to assist with the flood disaster. ISA was able to mobilise the environmental experts in a short space of time which serves as an example for the Department to follow. The failure to do maintenance reduces the value of properties and land with the result that the Department resorts to renting or leasing buildings from private owners. The Committee received a report of a dilapidated Umtata building because the Department was failing to do maintenance. She proposed that the maintenance portfolio be handed over to the IDT. She reminded the attendees that the Commission defended the IDT when the Minister wanted to close the entity. The young ladies at the helm of the IDT managed to turn the entity around. The Department must show that it has faith in the work of IDT by giving it projects to manage.

The Chairperson was proud of the young women of the IDT and observed serious improvement since 2019. She called on the Deputy Minister and representatives of the IDT and ISA to respond to the questions and comments from Members.

Deputy Minister’s response
Deputy Minister Noxolo Kiviet re-emphasised the Minister's opening remarks about the load of work which required the cooperation of all stakeholders. She agreed that maintenance was the weakest area across the board in government. She explained that there was a division of work rather than competition amongst the entities. The focus of IDT was on social infrastructure while the ISA programme involved working with the Department on leasing offices.

ISA response
Mr Tladi remarked that collaboration on the ROTP hinges on DPWI, National Treasury (NT) and user clients. The ISA scope of work is focused on commercial buildings. The strategy is centred on collaboration with the private sector. ISA was learning from successful business models in the market. Engagements with players in the refurbishment space yielded positive feedback. In response to the questions about Property Maintenance spend and under-utilised buildings, he indicated that further detail was available in the Annual Report. He undertook to provide the Committee with a breakdown of the numbers. He clarified that the Socio-economic Maximisation Model was at the development stage and was being piloted. The intention was to utilise the scale of economies to ensure a fair market share for the state. He undertook to obtain further detail from colleagues involved in the asbestos removal programme. The panel of expert firms would be contracted on a project basis in cases where internal skills are lacking. Internal resources are being used where available. Due process needs to be followed if external sources are required. He appreciated the engagement with the Committee and said the comments would add to improving and refining the ISA strategy.

IDT response
Ms Hill welcomed the comments and compliments and was grateful for the support of the Committee. The entity was taking small steps in advancing service delivery and looking forward to collaborating with all stakeholders.

Ms Malaka said the E-procurement system was a measure to address corruption in the education sector. Using the online system by service providers would prevent tampering with the procurement process. The capacity of the internal audit unit was beefed up to ensure compliance with processes and that measures are taken to account for shortcomings.

The Chief Executive, Programme Management Services, said the IDT execution plan would be shared with the Committee. The entity had regular interactions with the Minister and was bound by timelines. An integrated approach was needed to implement the ROTP. He valued the comments regarding heritage buildings and acknowledged that history is often damaged when the bigger picture is missed. He agreed that heritage specialists should be consulted where needed. He accepted the idea that lease agreements should include a maintenance element similar to the private sector, where facilities management companies have properly managed SLAs. The right people were needed to manage and implement the model. Multiple systems have to be amalgamated, requiring SETA's support to develop one infrastructure delivery system for the country involving all implementing departments. Maintenance should not be a reactive process but should start with the cleaning of facilities daily. He welcomed the spirit of the engagement and the comments aimed at improving the system.

Deputy Minister’s closing remarks
Deputy Minister Kiviet remarked that comments from Members were based on the PMTE performance which resulted in the ISA strategy. The understanding was that ISA had the expertise of professionals seconded from the private sector. The idea was to tap into the expertise to address the weaknesses. ISA was driving the strategy in collaboration with the PMTE. On the other hand, IDT was building infrastructure for the public sector including hospitals and schools. The problem is with the lifespan of construction companies which starts with building facilities and ends when the buildings are complete. Maintenance should be included in the budget and the responsibility for maintenance should be allocated upfront to address this particular weakness. The Department has to lead the implementation of the seamless IT system across all government departments and entities. A strategy was needed to deal with the maintenance backlog on existing buildings.

Deputy Minister Kiviet corrected the statement about mobilising environmental experts. It was not ISA but the Council for the Built Environment (CBE) that mobilised the 300 experts. The DPWI Asset Register received an unqualified audit for the 2020/21 financial year which meant that it passed the test. The goal was to maintain the status. The locations of unutilised and hijacked buildings are known to the Department. The strategy was to identify buildings for refurbishment. She explained that communities were free to contact the Department for access to unused buildings but proper procedures must be followed regarding the disposal policy. Unused buildings are being used as safe houses for GBV victims supported by the Department of Social Development and the SAPS. Non-governmental organisations (NGOs) that make use of government buildings have the option to buy the properties however the building should revert back to the state should the NGO cease to exist. She welcomed the discussion on the heritage issue and drew attention to the existence of the Heritage Council. The Department has been working with the Heritage Council on maintaining Parliament and other older facilities in the Western Cape. The Department would have to coordinate with regional offices regarding specialised maintenance work required in other regions. Responsibility for maintenance was clearly stipulated in the SLAs. The lack of maintenance was not a weakness in policy but execution hence the importance of the oversight role. She urged Members to share instances of challenges so that the Department could follow up.

Chairperson’s closing remarks
The Chairperson appreciated the presentations and responses. The rationale for the probing questions from Members is to keep citizens informed about the work of the Committee. Members report on properties which they identify in the course of doing constituency work instead of formal visits. She was satisfied that the situation would change. She was concerned about the high unemployment rate amongst young people and proposed that students from TVET colleges should be employed as artisans on maintenance projects. She valued the robust deliberations and discussion.

The meeting was adjourned.